The Union Budget 2025-26 has laid a strong foundation for economic growth, infrastructure expansion, and increased disposable income for the middle class. The introduction of tax relief, the SWAMIH Fund 2.0, and the ₹1 lakh crore Urban Challenge Fund have been widely welcomed. However, industry leaders believe the budget falls short in addressing key real estate sector concerns, such as liquidity constraints, single-window clearances, and home loan deductions.
Key Budget Highlights Impacting Real Estate
- Zero Income Tax Up to ₹12 Lakh: This move is expected to boost disposable income and increase housing demand, particularly in the affordable and mid-income segments.
- ₹1 Lakh Crore Urban Challenge Fund: Aims to transform cities into economic hubs, supporting infrastructure and real estate growth in Tier 1 & Tier 2 cities.
- ₹15,000 Crore SWAMIH Fund 2.0: Expected to revive 1 lakh stalled housing units, benefiting homebuyers and developers facing liquidity constraints.
- TDS on Rental Income Increased: Raising the TDS limit on rent from ₹2.40 lakh to ₹6 lakh will ease compliance burdens and improve rental housing investments.
- Tax Exemption on Two Self-Occupied Properties: Homeowners can now claim tax benefits on two properties instead of one, reducing tax burdens and promoting real estate investments.
- Expansion of GCCs in Tier-2 Cities: Will drive commercial real estate demand in emerging cities, boosting office space and warehousing needs.
- Digitization of Land Records: Expected to enhance transparency and efficiency in real estate transactions, boosting homebuyer confidence.
Industry Reactions
Dr. Niranjan Hiranandani, Chairman, NAREDCO & Hiranandani Group
The budget strengthens infrastructure investment and real estate demand, with the SWAMIH Fund 2.0 ensuring the completion of stalled projects. However, inadequate long-term investment and the absence of affordable housing incentives remain concerns.
Domnic Romell, President, CREDAI-MCHI
The increase in income tax exemption and rental TDS limits will benefit middle-class homebuyers and landlords. The SWAMIH Fund’s expansion is a welcome move, but further policy reforms, including GST rationalization, are needed to unlock the sector’s full potential.
Prashant Sharma, President, NAREDCO Maharashtra
While tax relief and urban development initiatives are positive steps, the budget lacks direct incentives like industry status and single-window clearances that could have accelerated real estate growth.
Badal Yagnik, CEO, Colliers India
The budget furthers the vision of ‘Viksit Bharat’ with reforms in urban development, taxation, and regulatory frameworks. The SWAMIH Fund extension and Urban Challenge Fund will accelerate real estate growth, while rationalized taxes will spur investments in residential real estate and REITs.
Shrinivas Rao, CEO, Vestian
The budget’s focus on employment generation, infrastructure, and increased disposable income will drive demand across all real estate segments. Additionally, the SWAMIH Fund and digitization of land records will strengthen homebuyer confidence. Infrastructure upgrades, particularly in air cargo, will fuel warehousing demand nationwide.
Piyush Bothra, Co-Founder & CFO, Square Yards
The zero-tax provision up to ₹12 lakh will boost homebuyers’ purchasing power. The ₹15,000 crore SWAMIH Fund is a crucial intervention for stalled projects, but increased home loan deductions could have further enhanced affordability and eased credit constraints.
Rohan Khatau, Director, CCI Projects
Infrastructure spending and PPP initiatives are welcome, but key reforms such as stamp duty rationalization and higher home loan interest deductions were expected. The sector may require mid-year policy interventions.
Vikas Sutaria, Founder, Irah Lifespace
The budget lacks incentives for NRI and HNI investments in luxury real estate. While TDS rationalization helps, easing investment norms for these segments could have further boosted the sector.
Shraddha Kedia-Agarwal, Director, Transcon Developers
The Urban Challenge Fund and infrastructure-focused projects will drive growth, but the real estate sector still needs tax rebates and industry status for sustained expansion.
Samyak Jain, Director, Siddha Group
The revamped tax structure and middle-class benefits will increase disposable income, empowering homebuyers and fueling sectoral growth.
Abhishek Jain, COO, Satellite Developers
The budget’s emphasis on urban development and tax relief is positive, but liquidity issues, taxation burdens, and policy hurdles remain. A more comprehensive real estate policy is required.
Manju Yagnik, Vice Chairperson, Nahar Group & Senior VP, NAREDCO Maharashtra
The budget strengthens economic resilience with its focus on infrastructure. However, a targeted housing policy and tax incentives would have further fueled real estate growth.
Rajiv Agrawal, Co-Founder, Saarathi Realtors
The tax relief and SWAMIH Fund 2.0 will make homeownership more accessible, unlocking new investment opportunities in real estate.
Anuj Puri, Chairman, ANAROCK Group
The budget focuses on economic growth, consumption, and infrastructure but lacks major announcements for affordable housing, leaving stakeholders hoping for mid-year interventions.
Conclusion
The Union Budget 2025-26 introduces significant tax relief and urban development initiatives, indirectly benefiting the real estate sector. However, industry experts believe the absence of direct incentives—such as higher home loan deductions, single-window clearances, and GST rationalization—limits the sector’s full growth potential. While the middle class gains from tax relief, developers and investors look forward to further structural reforms to sustain long-term real estate momentum.
Also Read: budget expectations for real estate
